Cantel Company produces cleaning compounds for both commerclal and household customers. Some of these products are produced as part of a joint manufacturing process. For example, GR37, a coarse cleaning powder meant for commerclal sale, costs $2.20 a pound to make and sells for $2.40 per pound. A portion of the annual production of GR37 is retained for further processing in a separate department where it is combined with several other ingredients to form SIIPol, which is sold as a silver pollsh, at $5.00 per unit. The additional processing requires 1/4 pound of GR37 per unit; additional processing costs amount to $3.40 per unit of Silpol produced. Varlabie selling costs for SiIPol average $0.30 per unit. If production of SilPol were discontinued, $3,500 of costs in the processing department would be avoided. Cantel has, at this polnt, unlimited demand for, but limited capacity to produce, product. Required: 1. Calculate the minimum number of units of SIPol that would have to be sold in order to justify further processing of GR37. 2. Assume that the cost data reported for GR37 are obtained at a level of output equal to 5,900 pounds, which is the maximum that the company can produce at this time. What is the expected operating income (ioss) under each of the foliowing scenarios: (a) all avallable capacity is used to produce GR37, but no SIPol; (b) 3,000 units of SiPol are produced, with the balance of capacity devoted to the production and sale of GR37: (c) 5,000 units of SIP sale of GR37; and (d) 7.000 units of SIIPol are produced, with the balance of capacty devoted to the production and saje of GR37. Complete this question by entering your answers in the tabs below. Calculate the minimum number of unts of Silpol that would have to be sold in order to justify further processing of GR37. (Round your answer to nearest whole number.) Cantel Company produces cleaning compounds for both commerclal and household customers. Some of these products are produced as part of a joint manufacturing process. For example, GR37, a coarse cleaning powder meant for commerclal sale, costs $2.20 a pound to make and sells for $2.40 per pound. A portion of the annual production of GR37 Is retained for further processing in a separate department where it is combined with several other ingredients to form S\|P Pol, which is sold as a silver polish, at $5.00 per unlt. The additional processing requires 1/4 pound of GR37 per unit; additional processing costs amount to $3.40 per unit of SiliPol produced. Variable seilling costs for SIPol average $0.30 per unit. If production of SIPol were discontinued, $3,500 of costs in the GR37. Required: 1. Calculate the minimum number of units of SIPol that would have to be sold in order to justify further processing of GR37. 2. Assume that the cost data reported for GR37 are obtalned at a level of output equal to 5,900 pounds, which is the maximum that the company can produce at this time. What is the expected operating income (loss) under each of the following scenarios: (a) all. avallabie capacity is used to produce GR37, but no SIP Pol: (b) 3,000 units of SiIPol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 5,000 units of SIP Pol are produced, with the balance of capacity devoted to the production and saie of GR37; and (d) 7,000 units of SIPPol are produced, with the balance of capacity devoted to the production and sale of GR37. Complete this question by entering your answers in the tabs below. Assume that the cost data reported for GR37 are obtained at a level of output equal to 5,900 pounds, which is the maximum that the company can produce at this time. What is the expected operating income (loss) under each of the following scenarios: (a) all available capacity is used to produce GR37, but no Sifpol; (b) 3,000 units of Supol are produced, with the balance of capacity devoted to the production and sale of GR37; (c) 5,000 units of Sipol are produced, with the balance of capacity devoted to the production and sale of GR37; and (d) 7,000 units of Silpol are produced, with the balance of capacity devoted to the production and sale of GR37, (Loss amounts should be ind cated with a minus slgn.)
